This one just in from Reuters: Oil has hit $75 a barrel for Brent Sweet Crude because of fears over Iran and their nuclear industry. Unstated as the Oil pimps haven’t quite got the press release done yet, is North Korea and their missile-based temper tantrum.
Considering it takes close to a month for crude bought today to get to your neighbourhood gas station, expect the prices to jump this afternoon, if they haven’t already. Yes, I know two hours is less than 30 days. We’re talking Oil Price Logic here, where the usual laws of physics, time and even gravity do not apply.
Oil Price Logic says that if there is a butterfly in Nigeria that is sitting on a tree, then that will affect Oil Prices, as the refinery worker will be distracted and the whole perfectly balanced Oil Price Logic, will suddenly fall out of step. Tankers will run around in circles in the Gulf of Mexico. Drillers will find petunias in the well heads. A staple puller in Mobile, Alabama will fall off a desk, causing a safety issue that will mean a refinery is off-line for six months and then, well, you know, supply and demand.
It’s funny how every little blip and fart on the planet drives oil prices up, but there are no events that that make oil prices go down. I’m certain that there is an oil price analyst right now trying to draw a link between Germany being semi-finaled out of the World Cup and a rationale for raising the price of oil.
I think I’ve got it: “More Germans will be driving home from the World Cup now that Germany is out of the finals. Therefore we have had to increase our refinery capacity, which mean the cost of delivering the product must reflect the increased demand for oil for Germany and England, as their soccer hooligans are now traveling back home.”
I think it works.
RoadDave 